China's exports seen solid as trade war heats up

China's exports growth is expected to have cooled only slightly in June, possibly further boosting a trade surplus with the United States in a test for Beijing as it tries to weather a volley of US tariffs on its goods that many fear could harm its economy.

The Trump administration on Tuesday raised the stakes in its trade dispute with China, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports, including numerous consumer items.

Washington's latest move came only days after it imposed 25 percent tariffs on $34 billion of Chinese imports, drawing rapid retaliatory duties by Beijing on the same amount of US exports to China.

All the same, given the most recent round of tit-for-tat tariffs went into effect only on Friday, there has been little impact on China's overseas shipments to date.

“All in all, the trade impact of the first round of the tariff should have a very limited impact on China's exports to the US, with the maximum loss of $5 billion,” Alicia Garcia Herrero, Chief Economist at Natixis Asia Research, wrote in a recent note.

That view was backed by the Reuters poll of 39 economists, which forecast Chinese exports growth of 10 percent year-on-year in June, cooling slightly from a 12.6 percent rise in May.

China's Ministry of Commerce said last week it would encourage exporters to develop new export markets, and would also use funds collected from tariffs to ease the impact from US trade actions on companies.

Imports growth was also expected to remain solid at 20.8 percent last month, the third straight month of 20-plus percent growth, albeit slowing again from the 26 percent surge in May.